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Malaysian PC market stagnant because of Thailand floods

AvantiKumar | March 16, 2012
IDC Malaysia: Malaysian PC market sluggish in fourth quarter, 2011.

Ng Juan Jin, Market Analyst, Client Devices, IDC ASEAN

PHOTO - IDC Malaysia market analyst, client devices research, Ng Juan Jin.



The recent Thailand floods have hampered the PC market in Malaysia in the fourth quarter of 2011, according to analyst firm IDC.

Only a marginal sequential growth of two percent to 698,000 units was registered in the fourth quarter, 2011, said IDC Malaysia market analyst, client devices research, Ng Juan Jin, on 7 March 2012. "Higher spending by the public sector managed to prevent a sharp decline in the overall market as government departments spent the remaining of their budget at the end of the fiscal year. However, in the retail segment, most vendors felt the pinch from hard disk drive shortages resulting from the severe Thailand floods which disrupted the supply of PC components to the entire region." 

Ng said the commercial segment outperformed the consumer segment, growing 22 percent from the previous quarter compared to a six percent decline for the latter. "The education segment was the primary contributor to the commercial market thanks to a large fulfilment of Classmate PCs to Primary 5 students in Terengganu schools. Public and private tertiary institutions also increased their spending during the months leading up to the year's end. However, overall enterprise spending in quarter four, 2011, showed mixed results. The large enterprise segment posted a stronger quarter due to large refreshment cycle orders from global accounts. However, hard disk drive shortages resulted in vendors prioritising these higher revenue generating deals over shipments to SMEs [small and medium enterprises] in this quarter."

 

Higher priority countries

He said that on the consumer segment, MNC vendors saw hard disk drives meant for local PC and notebook production diverted to higher priority countries in the region, such as China and Indonesia. "In light of these shortages, several vendors temporarily raised the price of their product lineups in order to maintain their revenue. However this decision did not pay off as price-conscious consumers avoided spending in this quarter and preferred to wait for an eventual decline in prices. These issues were further compounded by channels facing high inventory levels from previous quarters. Distributors and retailers held off on bringing in new stocks until the retail market recovers."

"We should see improvements in the first quarter of 2012 compared to the fourth quarter of 2011," Ng said. "Firstly, more than 300,000 netbooks under the government regulator Malaysian Communications and Multimedia Commission (MCMC) 1Million Netbooks programme will be shipped this quarter. Hard disk drive supplies are also expected to return to normal levels by March while vendors will be stocking up in advance for PC fairs in April. However, significant PC market growth may only be seen in the second quarter of 2012 as Intel's new IvyBridge architecture launch has been delayed to May 2012. Till then, vendors may be reluctant to bring in excessive stocks with soon-to-be outdated processors."

 

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